Using other PE firms to source deals?
Let's say I work at a family office and we want to begin direct investing in LMM deals in a certain sector (plus some other specific attributes). We have a relationship with a PE firm (very friendly with the guys but don't currently invest with them) that work on deals in the same sector, but a little larger than we would target. It's such that the PE firm would, every so often, come across a deal that would fit our criteria, but they themselves would never be interested. How could we go about getting connected with some of this deal flow, especially since we don't have much to offer in return? I'm thinking of bringing it up, mentioning if they ever come across a deal that matches our desired features that they can feel free to send it over. Then mention a small finders fee if there is any hesitation. Also thinking about who to even ask about this. I can ask the junior folks-- the ones sourcing the deals. Or I could ask some senior folks-- the ones we are acquainted with-- to mention this. to the juniors.
Any thoughts on this?
That all sounds reasonable. Whoever you feel most comfy asking may make sense. They may not even want a finders fee. They may just appreciate someone else investing in the company and then keeping them in the loop if the company grows into a size they may want to invest in at a later time. Good luck
I don't think you need to mention a finders fee - if you're friendly with them and they aren't going to do the deal anyway...
Just offer to kick anything their way that you wouldn't do.
Zero reason to offer a finders fee...what would they be paid for anyway? Forwarding you a bankers email?
Friends send friends deals all the time, thats what networks are for! Just keep up a friendly relationship and shoot them stuff that may be a fit when you see them etc
How often does your family office find deals that would be suitable for the PE fund?
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